Plantersbank taps $2-M loan for microfinance lending

Planters Development Bank has tapped a $2-million long-term loan from ShoreCap International Ltd. for relending through its microfinance lending program.

ShoreCap International is a US-based global private equity company that makes investments in financial institutions specializing in small and medium enterprises (SMEs) and microfinance development.

The $2-million investment is a four-year long-term loan with a 7.5-percent interest repayment rate.

"There will also be technical assistance extended by ShoreCap that can come in the form of international forums bringing together various financial institutions concerned with microfinance lending," said Jesus P. Tambunting, chairman of Plantersbank.

Tambunting also explained that Plantersbank and ShoreCap International could also form a consortium to help finance or assist other institutions.

"We could partner with Plantersbank to make investments or lending instead of making equity investments here," said Davis Golding, executive vice president and chief investment officer of ShoreCap International.

The long-term loan will go to the microfinance lending activities of Plantersbank after it absorbed the Microfinance Enterprise Bank (MEB), a joint venture with a several development financial institutions including the International Finance Corp. (IFC).

Plantersbank is the leading lender to SMEs in the Philippines. To strengthen its lending base for the SME market, it drew in foreign institutional investors like the Asian Development Bank (ADB), the Netherlands Development Finance Co., and the IFC.